Dispute Question

Last week I filled a dispute on a student loan that was showing a balance. The day after doing so my equifax score dropped 20 points. On Sunday the dispute went my way and is now showing zero balance but my score is still lower. How long before ill see the benefit from winning the dispute? The loan was past due but paid in full as of Jan 11. Set to fall off completely next Aug.

Re: Dispute Question

Last week I filled a dispute on a student loan that was showing a balance. The day after doing so my equifax score dropped 20 points. On Sunday the dispute went my way and is now showing zero balance but my score is still lower. How long before ill see the benefit from winning the dispute? The loan was past due but paid in full as of Jan 11. Set to fall off completely next Aug.

Welcome!

When a dispute is filed on an OC account (e.g. any loan, CC, LOC, etc.), FICO will ignore the balance, the CL, and the payment history. Once the dispute comment disappears, then it is fully scored into FICO. Other aspects like the age, mix of credit, impact to AAoA, impact to your scoring bucket, etc., are fully scored during a dispute.

When a dispute concludes, sometimes more negative information gets added like lates, payment status changes, dates get updated, etc. All of these can have a negative impact on a FICO score and it isn't uncommon to see a permanent score drop after you dispute an item, even after the dispute fully clears.

In your case, it isn't a CC, so ignore the CL. FICO ignored the $0 balance which really didn't matter anyway. Once you initiated the dispute, FICO did ignore the payment history. That may or may not have impacted your FICO in a positive way; depends on your overall credit.

Questions:

1) Where did you get your Equifax score? Was it based on an alert (e.g. ScoreWatch)?

I actually disputed a seperate item through Experian that didn't show up on my Equifax. That was an account that didn't have my SSN tied to it so that might be the reason it didn't show up everywhere. I got Experian through annualreports.com for free.

So are you saying it might have been better not to file this in the first place? Or will this eventually reap rewards?

Re: Dispute Question

SW alerts can be tricky to figure out. As you may know, whenever an account changes, SW will alert you to that change (e.g. notice for a change in the comments due to a dispute). At the same time of the credit alert, SW will also give you your latest score and announce the score change. Unfortunately the way it is created, it provides the alert with the score change and folks infer from that their score changed because of the alert and that's not always true. For example, I once got a credit alert for a 20 point increase because I added an inquiry. Inquiries do not increase your FICO. There were other changes to my EQ CR, namely a dropped baddie, that resulted in the +20. In your example, other things could have caused the 20 point drop like changes in util, a dispute comment elsewhere, a dropped account, etc. and those could have resulted in the score decrease. Definitely would be worth reviewing your EQ CR from somewhere just to see what changes occurred. Based on what you posted, I don't see how your score dropped due to a dispute comment on that loan; something else is there.

Re: Dispute Question

Not positive about the flag. I don't have access to the detailed Equifax anymore. It is showing a zero balance under the "latest report" under Equifax on this site though.

I'm assuming the drop was a result of this because I did the free trial here on Wed in which I was issued the Equifax score, a day later I filled the dispute and it dropped 20 points the following day.

I plan on cancelling Score Watch and going to the quaretly monitoring once my trial is up.

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